Making Money While You Sleep: A Passive Income Guide

Priyanka Chopra may be earning a ton of money today as a global movie star, but that hasn’t stopped her from exploring part-time jobs for income. Not only has she opened a swanky Indian restaurant Sona in New York City, she has also opened a retail spin-off called Sona Homes, with products such as tableware, she has also invested in upscale sportswear brand Perfect Moment, hair care brand Anomaly, and runs A film production company called Purple Pebble Pictures, and published her memoir Unfinished.

What Chopra does is basically create “passive income,” which is a way to earn extra income through investments or work already done, without having to work full-time. The ideal way to earn passive income is to focus on things that generate long-term income with minimal intervention on your part.

In contrast, active income requires you to constantly and actively work to maintain your income. Don’t confuse jobs like consulting, freelance writing, or computer programming with passive income — these jobs require the same amount of effort as active jobs.

Why do we need passive income?

Delhi-based Jayanth Ranganathan, senior director at IIFL Securities, said: “Passive income should be a part of every woman’s life. As Warren Buffett once said – ‘If you don’t make money in your sleep’ , you have to keep earning till you die”. Passive income is almost a necessity to survive in today’s turbulent economic conditions. It guarantees greater financial freedom and frees you from your 9-to-5 routine, This opens up other investment options. It also allows you to focus on meaningful financial goals, such as securing retirement. Passive income can reduce financial stress and take care of one’s passions, luxury spending or dream vacation.”

According to a survey conducted by Fidelity, by 2021, only 33% of women consider themselves investors, and only 9% of them think they are better at it than men. They also tended to invest less impulsive and more conservatively — 68 percent invested in cash equivalents, compared with 59 percent of men. For some reason, women have different strategies than men when it comes to finances and investing. However, as investments decrease, so do passive income opportunities.

What are the sources of passive income?

Ranganathan says: “There are a number of ways you can start generating passive income. Which or how much you choose also depends largely on a woman’s current financial situation, her social connections and time use. Some invest money, others Some invest in skills and talent to create passive income streams.” Ranganathan offers a range of passive income sources that beginners can start with and build upon:

• Rental income is considered one of the safest and oldest forms of passive income. If you don’t already own a property, consider buying one to house any excess funds you may have.

• Use the stock market and other investment returns based on your risk profile. Continuous passive income can be generated through stock market investments, fixed deposit returns, and investing in various other financial products. Consult with your financial advisor to see which balance of risk and reward is best for you.

• Recently, social media has generated great interest across age groups. YouTubers and Instagram users find themselves earning passive income based on their own passion and use of social connections. Affiliate marketing is also a branch of this.

• Consider hosting online instruction and teaching sessions. Especially after the recent COVID-19 outbreak, there has been an increased demand for academic and technical faculty on digital platforms where they can reach their full potential. You only need to create the material once for these courses, with minimal delivery work thereafter.

• Creatives can consider copyrighting their music, photos or books and get paid in royalties.

How do you start building passive income?

First, list the skill sets that people will keep paying for. Have you developed an app or an online course? Have you ever written an engaging book or eBook? Evaluate what you are good at and what you can use to build parallel revenue streams. If you’re thinking about investing—whether it’s a condo or a term deposit, you’ll also need to start building up your savings. Focus on your long-term passive income goals and work to build the bank balance that needs it.

What should you consider before committing?

Before starting a passive income stream, there are several aspects to consider, the most important of which is how financially it will affect you and your lifestyle. Passive income is not a get-rich-quick scheme. So, carefully weigh the positive long-term history, how much you can inject, how fast you need to return, what are the minimal risk factors, and the integrity of your investment.

Nrithya Kumar Vardhan, branch manager of a public sector bank in Bhuwaneshwar, said: “While passive income can be a lucrative proposition, be sure to read the fine print and caveats. Check your main employer’s rules. Whether you can Earn income part time? Are there any particular industries or companies that are off limits? What does your contract say? The last thing you want to do is face legal issues, so be very careful. Another aspect to consider is taxes Your passive income may be in a different category than your active income, but there are definitely tax needs, so check with your auditor to learn how to manage and arrange payments.”

The hard truth is that we all work 24 hours a day. During this time, most of us are not only engaged in active work, we also look forward to living fulfilling lives for ourselves, our families, and those around us. But that doesn’t mean we don’t need money to live this fulfilling life. This is an Article 22 situation, but passive income may be the solution. In the words of entrepreneur and author Robert Kiyosaki, “To achieve financial freedom, one must be either a business owner, an investor, or both, generating passive income, especially monthly.” Live, the only real passive is no income at all!

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